The Finance Ministry has imposed a temporary moratorium on Tamil Nadu-based Lakshmi Vilas Bank Limited. The bank does not allow customers to withdraw more than Rs 25,000 per month. These conditions are in effect until December 16th. If you want to withdraw more than that, you have to get permission from the Reserve Bank of India. However, the RBI allows withdrawals above Rs 25,000 only for certain emergencies such as medical, higher education and marriage. The decision was taken following the RBI’s suggestion that Lakshmi Vilas Bank should impose restrictions on withdrawals from the bank as its financial condition became alarming.
The RBI, on the other hand, has recommended to the central government that a moratorium be imposed on the bank as it has not come up with a proper plan to deregulate the bank. They said they had to make the decision under Section 45 of the Banking Regulation Act, 1949, to protect the money of bank customers and depositors.
Moratorium on Yes Bank in March
In March this year, RBI imposed a moratorium on another private bank, Yes Bank. As Yes Bank plunged into crisis, it imposed similar sanctions. After that, it slowly lifted the sanctions. Last month, the Enforcement Directorate attached assets worth Rs 127 crore belonging to Yes Bank co-promoter Rana Kapoor. The Central Agency has issued interim injunctions under the Anti-Money Laundering Act for the Apartment 1 flat at 77 South Audley Street, London.
Shares of Lakshmi Vilas Bank lost one percent on the BSE today. The share price closed at Rs.15.60. Lakshmi Vilas Bank urgently needs funding. Waiting for a buyer for one year. It is learned that Clicks Capital has already been consulted. Information on investing in a bank or, as discussed in the bank’s merger issues.
Lakshmi Vilas Bank has been proposed to be merged with India Bulls Housing before the RBI in 2019. However, the Reserve Bank did not agree. In an interview with Lakshmi Vilas Bank founder KR Pradeep Bloomberg last month, he said he had no liquidity problem. The bank said it needed an 80 percent liquidity coverage ratio of 26 percent. In September, shareholders demanded the removal of seven directors of the bank. In this regard, the RBI has appointed a tripartite committee to oversee the activities of the bank.